Each month we highlight one of the most successful investments in our Investor Spotlight. This week we talked to Matt and Naoko Inomata who recently sold a property in Everett for a big return on their initial investment!
ACQUISITION PRICE $196,00053%
SALE PRICE $370,000100%
MATT & NAOKO INOMATA
This is the second successful investment property for Matt and Naoko Inomata working with Heaton Dainard. Prior to working with us, the Inomatas began investing in renovations and rental properties in Indiana before moving to the West Coast and continuing a successful real estate career. Their latest investment in Everett is a three-bedroom one bathroom rambler that was in desperate need of a cosmetic lift. We asked Matt some questions about the process of reviving his Everett house into an equitable investment.
Q. The end result is beautiful, but it looks like this property had a lot of issues. Can you tell us what your initial impression of the house was?
My very first impression of the house was “Man, it’ll be weeks before we can do anything to this house…” That was because the house was full of ‘stuff’. It was hard to walk around because it was literally filled with stuff left by the seller.
What was left behind consisted of garbage, tons of books, furniture, clothing, shoes, magazines, CDs, take-out containers/utensils, needles, coins, tools, etc. In many of the rooms, things were piled up higher than my height (I’m about 5’10 or 177cm tall.). Even the backyard was filled with garbage such as PC monitors, cables, plastic bags, etc. Many of the items were buried in the yard. It’s important to not let the magnitude of the volume of garbage and clean-up throw you off.
Q. We have a lot of first-time investors and sometimes they aren’t prepared for all the things that can go wrong. As an experienced investor, can you describe some of the issues you ran into with this property? And how you handled them?
During the course of cleaning the interior/backyard, we filled four 40-cubic yard dumpsters. A 40-cubic yard dumpster was large enough to fill the entire driveway. When the dumpster company pulling out the third dumpster, the driver accidentally took out the electrical cable supplying power to the house, resulting in a power outage. The Police and Fire Department came and closed the street for a couple of hours. I immediately called the PUD, explained the nature of the emergency, and asked them to dispatch their emergency response unit to the house. In the end, the power was restored, and I got a free brand new electrical mast out of it. But it looked like a scene from the TV program, COPS.
We replaced the electrical box and rewired the entire house. Our contractor’s electrician agreed to do the rewiring; however, they simply refused to rewire after replacing the box. The contractor did not help resolve the dispute. Rather than trying to make the electrician rewire the house, we immediately sprang into action to find a new ‘reliable and honest’ electrician. This was a major setback because the re-wiring had to be done before anything else could be done to the house. It took us a few weeks before we finally found an electrician that was reliable, available immediately, and cost-effective. When a delay of this type happens, you just have to consider it as part of the rehab cost. No need to panic. Panicking will just cost you time and money, which will stress you out.
Q. Staying on budget can be a huge challenge sometimes, were you ever worried about your budget? What ways were you able to cut costs, but maintain high quality?
Budget is something that’s always on our minds because the moment you stop thinking about the budget, you start to lose track of where costs are coming from. Heaton Dainard’s preferred pricing is always very helpful. Amaya’s Flooring in south Everett and Piusin Seattle do excellent jobs at very reasonable prices. Also, you always have to negotiate prices. You have to make sure that you visit the project site very often and ask questions so that your contractor won’t try to cut corners. They need to know they are being watched. It is also very important that you set aside money for unexpected things that ‘will’ pop up because unexpected things WILL happen. If you don’t, your budget is likely to be under-funded from the start.
Q. What aspects of the project are you most pleased with?
We are so pleased with how the house turned out, especially considering how messy the house was at the beginning. This was all possible thanks to Jennifer’s extremely valuable advice. She is so wonderful. Not to mention, we are very pleased with the sale price of $370k.
Q. How would you describe your overall experience with Heaton Dainard?
Absolutely fantastic and that is, to say the least. We are looking forward to our next project with Heaton Dainard!!! Again, we can’t say enough great things about Jennifer. She is patient, extremely knowledgeable about flipping/current market conditions, and nice!